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Published on December 5th, 2008 | by admin

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Profits of doom

Is the private sector investing enough in education and skills training for young Namibians, asks Tileni Mongudhi

The costs of providing scholarships and bursaries for young Namibians are mainly being covered by the public purse. In 2006 the Ministry of Education, through its Namibia Student Financial Assistance Fund (NSFAF), was assisting more than 6,900 students with study loans totalling N$83 million. Even with this investment from the State, many would-be students struggle to find the funds for tertiary education. Meanwhile student fees are increasing and more and more students drop out of courses because they cannot maintain their tuition payments. For the 2008/09 year, the Ministry of Education allocated N$213 million for NSFAF, amounting to 4.6 percent of the ministry’s operational budget. Government also has the Namibia Human Resource Endowment Fund, which is not very active, but is supposed to finance the Namibia Government Scholarship and Training Programme (NGSTP). The fund started operating in 2000 and to date has granted 68 scholarships. So far 38 students have completed their studies, while 30 are still beneficiaries. This fund was started with N$600,000, donated by the United Nations. The Bank of Namibia administers the fund and it is worth US$6.9 million or about N$70 million. Investing in skills insight approached the top 20 profit-making companies in the country (based on a list published in insight in October 2007) and asked them how many bursaries they grant annually and how much it costs them. The list was published in insight’s October 2007 edition. There was little correlation between profits and the amount spent on educating Namibians. Of the 20 companies approached only ten responded. The most impressive response came from Rossing Uranium, even though it was not among the most profitable companies identified in 2007. The mining company currently provides 62 ordinary bursaries, 69 bursaries for employees’ children, and 151 apprentice bursaries. This includes students specialising in technical subjects at vocational training centres. In total, Rossing spent N$24 million on educational assistance in 2007 or 2.4 percent of their N$979 million after tax profits for that year. The figure of N$24 million, which does not include N$48 million that was donated to the Rossing Foundation, is the highest insight has seen so far. The Foundation also provides educational support and opportunities for many Namibians. Namdeb spends N$3 million annually on bursaries and scholarships. This amounts to one percent of their N$305 million after tax profit. Although the bulk of bursaries are awarded for studies in mining-related fields, Namdeb also grants bursaries in the education and accounting fields. Telecom spent N$8.7 million on education last year but only about N$1.9 million went to external bursary holders. The rest of the funds were used to fund further studies for the company’s existing electronic engineers and IT technicians. Last year Telecom had 32 external bursary holders. The parastatal forked out the highest in terms of percentage in relation to their profits – 7.6 percent of their after tax profit of N$114 million. However, only 1.6 percent of profits was spent on non-employees. NamPower spent 1.5 percent or N$ 2.5 million of their profits on providing educational opportunities. The power utility currently supports 68 bursary holders as well as eight disabled students. The energy utility also supports 15 vocational trainees every year. Bank Windhoek gives bursaries to eight students at the University of Namibia and four at the Polytechnic of Namibia, bursaries. Together these bursaries cost Bank Windhoek N$180,000 or 0.1 percent of the Bank’s after tax profit. Namibia Breweries is also in the same range – spending of N$136,000 on bursaries. Standard Bank spends N$100,000 on supporting students – 0.05 percent of their N$169 million after tax profits in 2007. Standard Bank gives two annual bursaries to Unam art students, five to students at the Rundu College of Education and nine to staff members who would like to study further. Nampost shut down its bursary fund three years ago, while the Road Constructor (RCC) Company also seem to be scaling down on the number of bursaries as they currently only have one person benefiting from their scheme – a hefty drop from 25 beneficiaries in 2003. No reply Other major companies like MTC, First National Bank, NedNamibia, Trustco, Namport, CIC, TransNamib and Namibia Airports Company did not respond to the questions sent. Old Mutual is planning to start their scholarship scheme next year. The company aims to educate about 10 Namibians annually at an estimated cost of about N$400,000. Despite the focus being on scholarships, it is important to note that some companies may also make donations directly to educational establishments. Recently the Pupkewitz Group donated N$10 million to the Polytechnic of Namibia’s School of Business Management. The money will be used to enhance the quality of education on offer at the school. Namibia has to consider how it can supplement the state input into providing bursaries and study loans. The role of the private sector is bound to come under closer scrutiny. One possibility – mooted in some political circles – is to force companies of a certain size by law to make a percentage of their profits available for bursaries. Another would be to more vigorously seek donations from the private sector for a national endowment fund. Most of the multinationals operating here still import foreign experts to occupy key or highly technical positions, pointing to the skills gap in Namibia. However, if such companies are seen to be passive when it comes to educating Namibians, they may inadvertently be making straps for their own backs – as Namibianisation becomes more of a political issue. Dashed aspirations Until last year Rachel Haipinge was a medical student at the University of Stellenboch, in South Africa. She now sits behind the reception desk at a local law firm. Haipinge was forced to drop her studies because she could not afford the costs. She was a beneficiary of the government’s Namibia Student Financial Assistance Fund (NSFAF) which offers study loans. However, she says the loan was not enough to finance her studies. During her last year of studying, before she dropped out, government gave her N$32,000. Tuition, accommodation, meals and books for the whole year cost N$55,000. With no one to support her, she returned to Namibia. Tjijandeua Kandetu, a third year medical student at the same university, says that there are a number of students in the same situation. Kandetu and many others are fortunate that their parents can come up with the extra money to pay for the fees. “Sometimes one gets grants of N$2,000 to N$5,000 from companies and last year the university paid some of my tuition because I did very well in the exams,” Kandetu says Company Profit after tax, in million N$* Contribution to bursaries in 07 % of profit Namdeb Bank Windhoek Standard Bank Namibia NamPower Namibia Breweries Rossing Uranium Telecom MTC First National Bank NedNamibia Trustco Namport CIC TransNamib Namibia Airports Company RCC Nampost DBN O&L Oryx Properties 305 163 169 145 121 979 114 337 304 40 30 11 16 17** 11 6 22 41** 27 55 N$ 3 million N$ 180 000 N$ 100 000 N$ 2.5 million N$ 136 000 N$ 24 million N$ 1.9 million Did not respond Did not respond Did not respond Did not respond Did not respond Did not respond Did not respond Did not respond Stopped offering Stopped offering Employees only Employees only Did not respond 1% 0.1% 0.05% 1.5% 0.1% 2.4% 1.6%


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